Barely half of all families in Britain own their own home, research highlighting the extent of the rise of generation rent shows.

A study by the Resolution Foundation thinktank has shown that official figures have exaggerated home ownership, which has been in steady decline since 2002.

The Office for National Statistics said the UK owner occupation rate rose sharply in the two decades after Margaret Thatcher’s government allowed council tenants the right to buy their homes at a discounted price.

But since the early 2000s, high house prices, weak growth in real incomes and tighter lending policies have combined to make home ownership harder despite a prolonged period of ultra-low interest rates and government subsidies for first-time buyers.

Lindsay Judge, senior policy analyst at the thinktank, said official figures overstated the true picture of home ownership. This was because they did not count the number of people who owned their own homes but the proportion of properties owned by an occupier.

That means if a person bought a house and took in three lodgers, the property would be counted as owner-occupied, but the three people renting would “drop out of the picture”, she said.

Similarly, five unrelated people sharing a house would be counted as one rented household. The same would be true for an adult returning home to live with his or her parents.

The thinktank revealed a markedly different picture of home ownership by analysing the proportion of families who own a home. The Resolution Foundation defines a family as a single adult or a couple along with any dependent children. Calculating the figures on that basis meant that owner occupationhad fallen to just 51%, compared with 63% in the early 2000s.

Using the more typical method to measure home ownership as a percentage of properties, seven in 10 homes were owner-occupied at the turn of the century, falling to 64% now.

The thinktank’s report said there were 5.8 million people who neither owned their own property nor rented privately or in the social rented sector. Of these, eight out of 10 were adult children living with their parents. Judge said there had been a big increase in the number of full-time students living at home.

Official figures also understated the extent of renting from private landlords, the Resolution Foundation said. “When we look at trends over time, we see that more than double the share of families live in the private rented sector today than did in 1992,” Judge said.

The Resolution Foundation, which works to better the lives of those on low and middle incomes, said the expansion of the private rented sector was partly due to people in their 20s sharing a home.

But Judge said the rise in the proportion of families privately renting who do not share with others had been just as important. “In 1992, just one in 20 families headed by a 35- to 44-year-old rented in this way. Today that figure stands at one in five.”

She added that the growing trend for families renting a property alone was not confined to the more expensive south-east of England but had also been particularly marked in Northern Ireland, the north-east and Yorkshire and Humberside.

 

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